The folks at McKenna Professional Imaging in Waterloo, IA, have something to celebrate in 2005, although president and COO Dave Mason isn’t planning a big bash. “This is the year,” Mason says, “when the price erosion brought on by digital imaging will be offset by our top-line growth.”
This sort of achievement might not be as emotionally satisfying as, say, winning a prestigious industry award. But at a time when digital photography remains a frustrating mix of blessings and curses, there might be no achievement that’s more important. It tells Mason that McKenna has finally, successfully made it through the digital transition.
What now? More of the same. “The challenge is to fill the pipeline,” Mason says. “Some of the plans and product offerings we think will help us do that may stick and some may not.” But the goal, he says, is to make sure that digital’s cursed price erosion doesn’t gain the upper hand. “Photographers stop proofing with digital imaging,” Mason notes. “That’s a high-margin product line for labs – traditionally, it’s at least 30 percent of an optical lab’s business. Plus, digital services are priced lower than optical services. Efficiencies from digital workflows give us a good margin lift, but you still have to maintain that top-line growth.”
Filling the pipeline is something Mason never envisioned having to grapple with only five years ago. His team has been coming to grips with a host of “front end” strategies and techniques that are once- if not twice-removed from making quality pictures. A self-described “lab rat” when he joined McKenna in 1996, Mason spends very little time in the lab anymore. Actually, he doesn’t have to. That’s because the trends and technologies that make top-line growth a big issue are the same ones that make lab operations, by contrast, a small issue.
“Basically, the shop runs itself, which allows me to focus on the front end,” Mason says. “The quality of digital equipment and the consistency of the output today are such that we really don’t worry about it like we used to. Optical output was variable and needed constant attention. Instead of working on the mechanical parts, now we concentrate on workflow and color management. Those are highly automated processes.”
‘Leapfrog With Digital’
That’s not to say McKenna is the most seasoned digital lab out there. “We were a relative latecomer to the game,” Mason says. Lab techs “were playing with digital retouching” five or six years ago, and the business acquired its first digital printer – a Fuji Frontier 370 – only in 2001. But here comes another blessing of digital imaging: “You’re able to ‘leapfrog’ with digital and offer benchmark products and services quickly,” Mason says. “We worked hard to transform our organization, and now we’re in a strong position.”
McKenna is primarily a “people” lab producing portrait, wedding and custom prints, although these days Mason is looking at just about any type of imaging. The business covers nearly 20,000 square feet and employs more than 100 people. Its primary vendor has been Fuji , and its digital turnaround is founded on Fuji ’s PickPro workflow solution as well as the DP2 workflow software – which together cover most of the known universe for managing digital image files.
Key output hardware includes two Frontier 370s, a 31 Pro Turbo, a Chromira 30, and the newest addition: a Fujimoto SHP5080 Digital Lab System purchased through Fuji Hunt. Only recently available in the U.S. , the SHP5080, which now takes on all the 20 x 30-inch and smaller prints, which in turn frees up the Chromira to concentrate on larger image printing – a smart workflow change. Mason says the image quality of the SHP5080 is great, but in keeping with the needs of the day, that wasn’t why he bought it.
“The 5080 is the most cost-effective means of printing these size images,” Mason says. “Output per capital dollar is the best there is in the market. And it gives us the integrated solution we needed. We don’t have to feed roll paper into a separate processor anymore, which reduces labor and cost. Its multi-paper handling allows us to offer more paper choices without tear-off and paper changes. Our enlargement printing workflow is much more efficient. The printer complements the ‘small batch philosophy’ we’ve adopted, and it helps us with our policy of guaranteed overnight fulfillment.”
‘Keep Things Nimble’
McKenna’s “small batch philosophy” and guaranteed overnight service option only scratch the surface of what Mason and his team are putting in place. With the lab providing the efficiency and flexibility the “front end” needs, Mason says marketing has become “a large point of emphasis for us.” So, among other things, McKenna offers turnkey marketing programs that photographers can employ to increase their revenues. Program fees are offset by product and service discounts, which add to the programs’ appeal and aid in relationship-building.
McKenna divides the market into two sand boxes and tries to play in both. One is the “no-frills” segment, Mason says, and the other is the “value-added” segment. “Everything is dynamic in the industry right now, so we’re always challenging our value statements,” he says. “The idea is to keep things nimble, keep things flexible, keep an eye on what’s happening in the marketplace